Track market-moving stories before they get noisy

LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ:OCSL) (“Oaktree Specialty Lending” or the “Company”) today announced that it will report its financial results for the third fiscal quarter ended June 30, 2026 before the opening of the Nasdaq Global Select Market on Wednesday, August 5, 2026. Management will host a conference call to discuss the results on the same day at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. The conference call may be accessed by dialing (.

Posted by Defense World Staff on Apr 1st, 2026

Ponce Financial Group (NASDAQ:PDLB – Get Free Report) and Oaktree Specialty Lending (NASDAQ:OCSL – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Profitability This table compares Ponce Financial Group and Oaktree Specialty Lending’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets Ponce Financial Group 14.72% 9.52% 0.91% Oaktree Specialty Lending 10.58% 9.75% 4.70% Volatility and Risk Ponce Financial Group has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Insider & Institutional Ownership 64.4% of Ponce Financial Group shares are owned by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 6.7% of Ponce Financial Group shares are owned by company insiders. Comparatively, 0.3% of Oaktree Specialty Lending shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings This table compares Ponce Financial Group and Oaktree Specialty Lending”s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Ponce Financial Group $194.94 million 2.07 $28.70 million $1.19 14.04 Oaktree Specialty Lending $316.80 million 3.14 $33.92 million $0.36 31.39 Oaktree Specialty Lending has higher revenue and earnings than Ponce Financial Group. Ponce Financial Group is trading at a lower price-to-earnings ratio than Oaktree Specialty Lending, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations This is a breakdown of recent ratings and price targets for Ponce Financial Group and Oaktree Specialty Lending, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Ponce Financial Group 0 1 1 1 3.00 Oaktree Specialty Lending 2 5 0 0 1.71 Oaktree Specialty Lending has a consensus target price of $12.88, suggesting a potential upside of 13.94%. Given Oaktree Specialty Lending’s higher probable upside, analysts plainly believe Oaktree Specialty Lending is more favorable than Ponce Financial Group.

Summary Ponce Financial Group beats Oaktree Specialty Lending on 8 of the 15 factors compared between the two stocks.

About Ponce Financial Group (Get Free Report)

Ponce Financial Group, Inc. operates as the bank holding company for Ponce Bank that provides various banking products and services. It offers various deposit products, including demand accounts, NOW/IOLA, money market, reciprocal deposits, savings accounts, and certificates of deposit to individuals, business entities, and non-profit organizations, as well as individual retirement accounts. The company also provides real estate-secured loans, which includes one-to-four family investor-owned and owner-occupied residential; multifamily residential; nonresidential property; construction and land; commercial and industrial; and business and consumer loans, as well as lines of credit. In addition, it invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as corporate securities, mortgage-backed securities, and Federal Home Loan Bank stock. Ponce Financial Group, Inc. was founded in 1960 and is headquartered in Bronx, New York.

About Oaktree Specialty Lending (Get Free Report)

Oaktree Specialty Lending Corporation is a business development company. The fund specializing in investments in middle market, bridge financing, first and second lien debt financing, unsecured and mezzanine loan, mezzanine debt, senior and junior secured debt, expansions, sponsor-led acquisitions, preferred equity, and management buyouts in small and mid-sized companies. It seeks to invest in education services, business services, retail and consumer, healthcare, manufacturing, food and restaurants, construction and engineering. The firm also seeks investment in media, advertising sectors, software, IT services, pharmaceuticals, biotechnology, real estate management and development, chemicals, machinery, and internet and direct marketing retail sectors. It invests between $5 million to $75 million principally in the form of one-stop, first lien, and second lien debt investments, which may include an equity co-investment component in companies. The firm invest in companies having enterprise value between $20 million and $150 million and EBITDA between $3 million and $50 million. The fund has a hold size of up to $75 million and may underwrite transactions up to $100 million. It primarily invests in North America. The fund seeks to be a lead investor in its portfolio companies.

Receive News & Ratings for Ponce Financial Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ponce Financial Group and related companies with MarketBeat.com's FREE daily email newsletter.

« PREVIOUS HEADLINEReviewing Cantor Equity Partners II (CEPT) & Its Competitors

NEXT HEADLINE »Selectis Health (OTCMKTS:GBCS) versus Elevance Health (NYSE:ELV) Head-To-Head Survey

LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ:OCSL) (“Oaktree Specialty Lending” or the “Company”) today announced that it will report its financial results for the second fiscal quarter ended March 31, 2026 before the opening of the Nasdaq Global Select Market on Tuesday, May 5, 2026. Management will host a conference call to discuss the results on the same day at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. The conference call may be accessed by dialing (800.

On April 14, 2026, Oaktree Specialty Lending Corp OCSL shares rose 3.1% today, bringing the current price to $12.41. The stock has traded in a 52-week range between $10.63 and $14.90, reflecting some volatility in its performance.

GF Value™ verdict: Current price is $12.41, which is 63.5% below the GF Value™ of $34.00.GF Score™: 57/100, indicating an average level of attractiveness.Most notable signal: Insiders bought $0.0M in the last 3 months, indicating no selling activity. Is OCSL Overvalued or Undervalued? According to the GF Value™, Oaktree Specialty Lending Corp is currently undervalued with a significant margin of safety. The stock's current price of $12.41 is substantially below the estimated fair value of $34.00, suggesting a potential upside of 63.5%. However, it's important to consider that the GF Valuation label indicates this stock may represent a possible value trap, which means that while it appears undervalued, there might be underlying issues that could prevent a recovery in price.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Investors should conduct further analysis to understand the risks associated with this valuation, especially considering the average GF Score™ and the low ranks in financial strength and profitability.

How Does OCSL's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 34.5x 21.1x Forward P/E 8.5x - With a current P/E of 34.5x, OCSL is trading significantly above its 5-year median P/E of 21.1x, indicating that the stock is currently overvalued based on its historical valuation metrics. The forward P/E of 8.5x suggests that there may be expectations for improved earnings in the future. This P/E analysis does not fully align with the GF Value™ verdict, which indicates undervaluation, as the high current P/E could point to potential risks that investors should be aware of.

What Does OCSL's GF Score™ Tell Us? Metric Rating GF Score™ 57/100 Financial Strength 3/10 Profitability 3/10 Growth 6/10 Valuation 2/10 Momentum 2/10 The GF Score™ of 57/100 suggests that OCSL is in an average position compared to its peers. The strongest area is its growth rank of 6/10, indicating some potential for future performance. However, the weakest areas are in financial strength and valuation, both rated at 3/10 and 2/10, respectively. This suggests that while there may be opportunities for growth, the company's financial health and valuation metrics are concerning.

What Are Insiders Doing with OCSL Stock? In the last three months, Oaktree Specialty Lending Corp has seen no insider selling activity, with insiders buying $0.0M worth of stock. This lack of selling could be interpreted as a sign of confidence among insiders in the company's future prospects, but the absence of purchasing activity may also indicate caution in the current valuation landscape.

What This Means for Investors Based on the GF Value™ analysis, Oaktree Specialty Lending Corp appears undervalued at its current price of $12.41. However, potential investors should be aware of the risks highlighted by the GF Valuation label indicating a possible value trap. It is crucial to conduct further due diligence and consider the broader financial metrics before making any investment decisions.

For the complete analysis, visit the Oaktree Specialty Lending Corp OCSL stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is OCSL's GF Score™?

OCSL's GF Score™ is 57/100, indicating that the stock is in an average position compared to its peers based on key factors.

Is OCSL overvalued or undervalued?

OCSL is currently undervalued based on GF Value™, which estimates a fair value of $34.00 compared to the current price of $12.41.

What is OCSL's P/E ratio?

The current P/E (TTM) for OCSL is 34.5x, which is significantly higher than its 5-year median P/E of 21.1x, suggesting that the stock is trading above its historical valuation.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Capitol Federal Financial (CFFN - Free Report) came out with quarterly earnings of $0.16 per share, missing the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -5.88%. A quarter ago, it was expected that this holding company for Capitol Federal Savings Bank would post earnings of $0.15 per share when it actually produced earnings of $0.16, delivering a surprise of +6.67%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Capitol Federal, which belongs to the Zacks Financial - Savings and Loan industry, posted revenues of $57.73 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 2.84%. This compares to year-ago revenues of $48.79 million. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Capitol Federal shares have added about 15.7% since the beginning of the year versus the S&P 500's gain of 4.3%.

What's Next for Capitol Federal?While Capitol Federal has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Capitol Federal was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.18 on $61.59 million in revenues for the coming quarter and $0.70 on $240.93 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Savings and Loan is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Oaktree Specialty Lending (OCSL - Free Report) , another stock in the broader Zacks Finance sector, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 5.

This specialty finance company is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of -20%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Oaktree Specialty Lending's revenues are expected to be $73.45 million, down 5.3% from the year-ago quarter.

Oaktree Specialty Lending (OCSL - Free Report) came out with quarterly earnings of $0.38 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.45 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +6.53%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.38 per share when it actually produced earnings of $0.41, delivering a surprise of +7.89%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Oaktree Specialty Lending, which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $70.39 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 4.17%. This compares to year-ago revenues of $77.57 million. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Oaktree Specialty Lending shares have added about 1.3% since the beginning of the year versus the S&P 500's gain of 5.2%.

What's Next for Oaktree Specialty Lending?While Oaktree Specialty Lending has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Oaktree Specialty Lending was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.36 on $73.41 million in revenues for the coming quarter and $1.49 on $295.22 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Blue Owl Capital Corporation (OBDC - Free Report) , is yet to report results for the quarter ended March 2026. The results are expected to be released on May 6.

This company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of -10.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Blue Owl Capital Corporation's revenues are expected to be $423.09 million, down 8.9% from the year-ago quarter.

Oaktree Specialty Lending has been a structural underperformer for quite some time. The recent earnings report did not change anything. While the NAV dropped significantly and the dividend got cut yet again (as I predicted), I think that the actual situation is not that pessimistic.

BDC sector Q1 2026 earnings reveal widespread NAV contractions, impacting both discounted and premium BDCs. Despite NAV declines and negative price reactions, these adjustments are logical and not a signal to exit the BDC space. Price-to-NAV ratios remain attractive, with several BDCs trading at significant discounts post-earnings.

Oaktree Specialty Lending remains rated 'Hold' due to persistent high non-accruals and sub-optimal credit quality. OCSL trades at a 23% discount to NAV, reflecting elevated credit risk and recent dividend cuts. The BDC lowered its regular dividend by 25% but paid a supplemental dividend of $0.04, which lowered the effective dividend cut to 15%.

Small Cap write on sticky notes isolated on Office Desk. Stock market concept

getty

Small-cap stocks are the cardiac kids of the market. They can bring high risk, and with that high risk can come high reward. For the first half of the 2020s, the reward hasn’t been there—but that’s beginning to change this year. And today, we’re going to discuss five small caps paying between 6.5% and 15.3% in dividends.

Small caps have lagged over the last 10-year period. Large caps outperformed them handily from 2016 to 2020, and then again from 2020 to 2025. But you can see in the chart below that we now have a turn—small caps have outperformed large caps year-to-date by a margin of 16% to 11%.

Small Caps Outperform

Ycharts

You’d never guess it, by the way, if you were tuned into CNBC or reading the mainstream financial headlines—because nobody else is talking about small caps.

But we contrarians prioritize high income along with value. We want to buy stocks when they’re cheap, so they can appreciate while they pay us. And when we look at the broader market’s forward P/Es, we see that the S&P SmallCap 600 boasts a price-to-earnings ratio of 15.9—cheaper than both the MidCap 400 and the S&P 500.

S&P 500: 21.0S&P MidCap 400: 16.4S&P SmallCap 600: 15.9Their loss. Our gain.

If we keep our eye on high yields and relative values in the small-cap space, we can set ourselves up for total-return success even if the broader market doesn’t cooperate. Right now, I’ve got a few of them on my radar—a five-pack of small caps paying us a super-sized 10.4% on average.

MORE FOR YOU

Small Cap Stock #1: Newell Brands (NWL)The name Newell Brands (NWL) likely won’t ring a bell, but we’ve all heard of at least some of the home-goods giant’s brands: Rubbermaid containers. Crockpot and Sunbeam kitchen appliances. Mr. Coffee coffeemakers. Calphalon cookware. Yankee Candle. Elmer’s glue, Sharpie markers and Paper Mate pens. Newell even goes outside the home with Coleman camping gear and Bubba water bottles.

It has never been a massive operation, but what was a $25 billion company less than a decade ago has shriveled to about $1.5 billion—well in small-cap territory and NWL’s lowest valuation since the Great Financial Crisis.

What hasn’t gone wrong for Newell? A number of brand acquisitions turned into busts. The decline of physical retail hurt brands like Yankee Candle. Periods of weak consumer demand never seemed to be met with a resurgence in interest for its various products when the economy improved.

Newell’s financials have eroded. Revenues haven’t improved since 2021. The company has posted net losses in each of the past three years, and in five of the past 10. Net debt of more than $5 billion has remained persistently high. In 2023, NWL slashed its dividend by 70%—not much less than what it was forced to cut back during the depths of the GFC.

The view from 10,000 feet is terrible, and NWL’s price matches the view: Shares trade at less than 6 times this year’s earnings estimates.

The question is whether there’s anything else other than a fire-sale valuation, and the answer is: possibly.

After years of hemorrhaging on both the top and bottom lines, Newell is expected to finally grow both in 2026, albeit very modestly. And Wall Street thinks the company is poised to make a much more substantial improvement to profits (+15%) in 2027. It made progress toward those goals in Q1, thanks to a better-than-expected net loss, higher revenues and thicker margins.

It’s not much given Newell’s lengthy track record of poor operational performance, plus the broader economic picture still isn’t favorable. But we might want to revisit NWL if it starts stacking similarly successful reports.

Small Cap Stock #2: Betterware de México (BWMX)Newell isn’t the only small-cap home goods story worth eyeing. Betterware de México (BWMX) covers similar territory—kitchen, storage, cleaning—but with a very different financial track record.

Betterware is a direct-to-consumer selling company that offers home organization, beauty and personal care products not just in Mexico, but here in the U.S. It offers fragrances, skin care products and toiletries, as well as laundry and cleaning supplies. And there’s some overlap with Newell in that it offers kitchen and food preservation supplies.

It has predominantly done this under the Betterware and Jafra brands—so much so that the company also refers to itself as “BeFra.” However, it has just folded in a very familiar third name: Tupperware. Just a couple days ago, BWMX closed on its purchase of the Tupperware brand’s operating assets in Latin America.

Betterware, like Newell, spiked in 2021-22 before rapidly retreating, but it has done so on virtually opposite results. Revenues have grown every year since 2020, when it became the first Mexican company to directly list on the Nasdaq. The bottom line hasn’t been as consistent, but BWMX has been solidly in the black every year since coming public.

So whereas Newell has remained in a tailspin, BWMX has been in a broader uptrend since 2023, and has delivered a 140%-plus total return in the past year.

Despite this meteoric rise, shares trade at only 8 times this year’s earnings estimates.

But there are two things to watch out for here:

Like many international companies, BWMX has a “pay what you can” distribution that can vary from one year to the next. We also get extra variance from one quarter to the next because of the exchange rate between the dollar and the Mexican peso.As I mentioned above, Betterware is a direct-to-consumer company. That’s a polite way of saying that it’s a multi-level marketing (MLM) operation. Buyer beware.Small Cap Stock #3: Oaktree Specialty Lending (OCSL)Many of the biggest payers in small-cap land are going to come from specialty niches, such as business development companies (BDCs)—finance firms that provide debt or equity capital to smaller businesses when traditional banks don’t want to step in.

Take Oaktree Specialty Lending (OCSL), for instance.

Oaktree is a private debt BDC with a portfolio of 163 companies under its wings. It predominantly deals in senior secured debt, much of that first lien, and most of its debt investments are floating-rate in nature—helpful when Fed rates are rising, but not great when they’re in decline.

OCSL specializes in distressed and opportunistic credit markets, which can be lucrative, but its risk-taking hasn’t always paid off. More problematic of late, though, has been its industry mix. Oaktree’s 20%-plus exposure to software and services would’ve been considered a positive in previous years, but disruption from AI has burned many BDCs with tight ties to the industry.

The company’s fiscal Q2 net asset value (NAV) was 6% less than it was a year ago and about 4% less than the prior quarter—partially to blame were markdowns in the software portfolio, whose fair value dropped by a few percentage points. OCSL’s stock has more than reflected these issues, off 16% over the past year (and 7% year-to-date). So while we were paying 87 cents on the dollar a year ago, we’re only paying 78 cents today.

That, and the 11% yield, would make Oaktree a screaming deal if we had any clue for just how long we’d actually be getting that 11% yield.

BDCs, like real estate investment trusts (REITs), are required to pay out at least 90% of their taxable income as dividends. Rather than promise above and beyond that and risk overstretching, many BDCs will sometimes pay a constrained (but still generous) regular dividend that they’ll supplement with special dividends as net investment income allows.

Oaktree doesn’t often pay specials, and the past couple of times it has done so, it has come in tandem with a large cut to the regular dividend, helping soften the income blow. When it cut from 55 cents to 40 cents in February 2025, it added a 7-cent special that withered to 2 cents the next quarter and evaporated by the fall. OCSL announced in May that it would clip its regular distribution again, to 30 cents, but offered an additional 4 cents in supplementals.

OCSL isn’t shy about sharing the wealth when times are good—it’s there in the chart, too, including raises to the regular dividend and a couple of nice supplementals. But until non-accruals shrink and NAV finds a floor, that fat yield is a consolation prize, not a reason to buy.

Small Cap Stock #4: Arko Petroleum (APC)Arko Petroleum (APC) is a freshly minted stock that got its start earlier this year, and rarely will you see such a high payout from an IPO outside of the REIT/BDC set.

In February, ARKO Corp. (ARKO), one of the nation’s largest operators of convenience stores and wholesalers of fuel, spun off the primary operating entity of its wholesale, fleet fueling and GPM Petroleum fuel supplying businesses.

That new publicly traded company, Arko Petroleum, has come out swinging, paying a pro-rata 26 cents per share in April, then announcing in May that it expected to pay 50 cents for its full dividend during the second quarter. That comes out to a wild 10%-plus yield at current prices.

And while it’s not dirt-cheap, it’s still relatively inexpensive. Wall Street is looking for roughly 30% earnings growth this year and another 11% next year. Yet shares trade at just 14 and 13 times those estimates, respectively.

There’s real short-term danger here, of course. APC went public just before the Iran war, so it started trading amid a reasonable gas-price environment, only to quickly face extreme volatility in the energy markets. The company says that while customer behavior is changing—people are making more frequent but smaller-ticket visits—it hasn’t yet seen any demand destruction. But that could be coming if the Strait of Hormuz remains closed throughout the summer.

Still, Arko Petroleum is managing things well so far. Results from its first full quarter as a publicly traded company were well ahead of the Street consensus, and the company plans to add another 20 NTI Fleet Fueling stores, which is expected to boost its margins. It also has an interesting ace up its sleeve. APC receives 1.25% prompt-pay incentives from its fuel supply partners—when gas prices rise, so too do these incentives, which the company says “largely [eliminates] our exposure to commodity price movements.” That wouldn’t fully offset the harm if consumers avoid the pump this summer, but it’s a helpful buffer.

Small Cap Stock #5: PennyMac Mortgage Investment Trust (PMT)We can’t talk about high-yielding small caps without talking about mortgage REITs (mREITs).

Mortgage REITs borrow money at short-term rates to purchase mortgages (and other assets) that pay income tied to long-term rates, then profit off the difference.

They want short-term rates to be lower than long-term rates (and they usually are), and their ideal situation is for short-term rates to be declining while long-term rates hold steady or move lower. The mREITs’ existing mortgages, which were issued when rates were higher, will yield more than newly issued ones, and thus be worth more.

PennyMac Mortgage Investment Trust (PMT) primarily invests in residential mortgage-related assets. Its business is split into three categories:

Credit Sensitive Strategies: credit risk transfer (CRT) agreements, subordinate mortgage-backed securities (MBSs), credit-linked MBSsInterest Rate Sensitive Strategies: Mortgage servicing rights (MSRs), agency MBSs, senior non-agency MBSs, collateralized mortgage obligations (CMOs)Aggregation and Securitization: Purchasing, pooling and reselling newly originated prime-credit-quality loansBecause mREITs tend to be much more sensitive to external factors (namely interest rates) than physical-property REITs, their dividends tend to skew a bit more mercurial. Rate cuts are common, though so are increases if the environment allows. PMT itself has cut twice—a COVID-era cut that was reversed, as well as a smaller reduction in 2022 that it hasn’t yet walked back.

Because mREIT dividends often compensate for poor price performance, we really want to pick our shots. Right now, for instance, PennyMac has been shellacked, off 15% year-to-date even with its monster dividend included. That has PMT shares trading at less than 9 times 2026 earnings expectations and 7 times 2027 estimates, and at just 70% of book value.

But PennyMac isn’t down for nothing. Its Interest Rate Sensitive Strategies arm has been struggling, and management expects that to continue. That led to a wide Q1 miss and lowered guidance.

Here’s the number that keeps me cautious: PMT’s portfolio is generating run-rate potential of 31 cents per share per quarter. It’s paying out 40 cents. That’s not a yield—that’s a countdown. Unless the other segments step up fast, another cut is a real possibility.

Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: Your Early Retirement Portfolio: Huge Dividends—Every Month—Forever.

Disclosure: none